Emerging Exports

Known for their vibrant culture and dynamic economies, our Latin American neighbors to the south are not only geographically diverse but also rich in agricultural opportunities for Missouri’s No. 1 cash crop. By rail or river, soybeans make their way from the Show-Me State to central Mexico and all the way down to the southern tip of Chile. At each stage of the journey, industry leaders such as Ag Processing Inc. (AGP), the U.S. Soybean Export Council (USSEC) and state checkoff programs work tirelessly to cultivate markets and nurture buyer relationships, forging a trail of opportunity that spans continents.

This year, the Missouri Soybean Merchandising Council (MSMC) joined forces with four other qualified state soybean boards (QSSBs) in a strategic partnership with AGP for a comprehensive four-part initiative aimed at boosting soybean demand in the Midwest. This multifaceted project included trade missions designed to engage with key buyers in Mexico and Chile. Following these missions, farmers then hosted company representatives at their farms to explore the practices and reliability of U.S. soybean farmers.

PUSHING PROTEIN

“International travel allows us to gain invaluable insight into markets while opening doors to new opportunities for soybean meal and other products,” said MSMC chairman and farmer-leader Aaron Porter. “Through the partnerships we have established and fostered during these missions, we’ve successfully positioned U.S. soy as a premium commodity, distinguished by its exceptional quality and the sustainable practices behind its production.”

In February, Porter participated in the mission to Mexico, allowing him firsthand experience to see the tangible benefits that have resulted from similar visits.

“Latin America, and Mexico in particular, offers tremendous growth potential for Missouri’s soybean industry,” said Porter. “While the desire is to remain domestic, their interest in animal protein is fueling rapid expansion in meat production, further driving the need for a high-quality protein like soy.”

Several decades ago, the soybean market primarily revolved around the demand for soybean meal. However, the same cannot be said today. Renewed interest for renewable fuels, coupled with soybean oil as a substitute for petroleum in various products, has completely reshaped the industry. Additionally, recent crush expansion announcements within the United States further underscores the need for locating new soy protein export opportunities while indicating future reductions in meal prices.

The solution to this challenge lies in Central and South America. In 2022 alone, this region contributed significantly, with meal exports surpassing $2.8 billion.

Companies such as AGP have made substantial investments in expanding their infrastructure to bolster these markets. Leveraging their considerable footprint in the Pacific Northwest (PNW), they transport shipments to the Gulf or utilize their facility in St. Joseph, Missouri, to send by rail down to Mexico.

“This year, we have seen excellent upturns in our exports to Chile,” said Alvaro Cordero, senior export trader for AGP. “In fact, we had an incredible breakthrough in that particular market as we’ve sent more than 150,000 tons of meal in the last year alone.”

With more than two decades of experience, Cordero observes that their primary competition in the region doesn’t typically come from fellow U.S. traders. Instead, it often stems from beans originating in Argentina or Brazil, which usually boast higher protein levels due to their country’s proximity to the equator.

When asked what he views as our competitive advantage against the aforementioned countries, Cordero responded, “I think the key takeaway here is that Latin American buyers experience the high-quality and consistent products we can deliver from the U.S. It’s been a stable and reliable process. Our South American partners are quite pleased, and this positive outcome is a result of not just our efforts but also the industry’s collaborative work. That is why partnerships like the one we have with the Midwest QSSBs is so important.”

SUSTAINBILITY AS A SOLUTION

While U.S. soy may face competition in terms of protein levels, the sustainability practices of our producers are second to none, providing an added layer of preferability for the commodity. Research indicates that more than 70% of consumers prioritize foods produced through environmentally responsible methods for the long-term health of the planet. Naturally, markets and buyers are aligning with this trend.

“At the end of the day, a lot of trading is done based off relationships,” emphasized Ritzman. “When we bring buyers from the Americas, we allow them the opportunity to connect with the individuals behind the products they purchase. This allows them to learn about generational farming practices and hear stories on how our farm families have invested in the land for generations.” USSEC plays a pivotal role in managing these relationships and reinforcing the potential for the U.S. to contribute to a company’s sustainability objectives, even once the trade missions have ended.

“As we endeavor to foster relationships with Latin American buyers, it’s crucial to acknowledge that motivations extend beyond mere nutritional metrics,” said Carlos Salinas, the Americas regional director for USSEC. “These figures do hold immense significance. However, the narrative surrounding the sustainability and market investment of U.S. soy is equally compelling.”

In fact, the sustainable practices of our farmers are of such high value that they warrant an official label. Companies that pledge to source a minimum of 60% of their soybeans from the United States for the manufacturing of their products may now utilize USSEC’s ‘Sustainable U.S. Soy’ (S.U.S.S.) mark on their packaging. In countries such as Chile, where country-of-origin labeling requirements exist, the S.U.S.S. label may bring substantial value to their profit margins.